DAVIS: A PROMISE OF LEADERSHIP / It's His To Make Or Break / New governor's inheritance includes opportunity to fail

Carla Marinucci, Chronicle Political Writer

Published
4:00 am PST, Friday, December 11, 1998

On January 4, Joseph Graham Davis Jr. will, at last, advance the 15 steps that have taken him 25 years.

And when he finally walks into his Capitol office as California's 37th governor, Davis will confront two political ghosts that will shape his administration and his legacy -- Jerry Brown and Pete Wilson.

From Democrat Brown, whose free- form two terms as governor forced Davis as his chief of staff to exert discipline and control, Davis inherits a commitment to frugality and diversity.

From Republican Wilson, who went into office as the state sank into recession and leaves it on an economic high, Davis inherits an agenda fraught with opportunity and danger.

"We are bequeathing to Gray Davis an economy that is the envy of not only the nation, but the world," said state Senator Jim Brulte, a leading Republican who has worked closely with both Wilson and Davis. "(We have) an education system that is on the verge of an explosion in productivity, a university system that is still a model for other states and the Silicon Valley that is taking the country to the next century."

Indeed, the pressure is on, with Democrats controlling both houses of the Legislature and Davis preparing to oversee the process of redrawing legislative boundaries, which could shift the balance of power in Congress at the turn of the century.

"If, four years from now, Californians

are worse off," Brulte says, "there's only one political party they get to point the finger at."

But political observers say that Davis -- a consummate strategist whose stunning win may solidify Democrats' influence on public affairs for years to come -- long ago mapped out the minefields ahead of him. He may have needed a quarter of a century to take 15 steps to the governor's office; Davis knows he has just four years to prove that he belongs there.

Davis will assume the task of overhauling California's giant public school system, a job upon which, political observers say, his future will depend.

He inherits a state riding a wave of prosperity, even as questions loom about a shrinking surplus and the battering its economy may take from foreign markets in the coming year.

He will take office as another tidal wave of new Californians begins to make a home here, requiring a delicate dance between environmental protection and the building of freeways, homes and transportation systems to meet their needs.

And although he reigns in the nation's high-tech state, he faces an immediate crisis in ensuring that its agencies and their computers are prepared for the year 2000.

"It's a once-in-20-year opportunity," said Wade Randlett, an activist in the Democratic Leadership Council and the Technology Network, an advocacy group of influential Silicon Valley leaders. "Once every generation, state government is fundamentally shaken up, and in a very bipartisan way among the citizens. People are looking for answers," said Randlett. "They want a real sweep."

For Davis, the success of that sweep will depend on the relationship he has with fellow Democrats in the Legislature, who can either enhance his power or hog-tie him.

Democratic leaders, including state Senate President Pro Tem John Burton of San Francisco and Assembly Speaker Antonio Villaraigosa of Los Angeles, "are the ones who want to see the expansion of government, and obviously this is going to create some pressures," said departing Governor Pete Wilson in a recent interview.

He said Davis must convince them of the merits of "not giving free rein to excess, and sending things down to Gray that will embarrass him. I think he will make that clear to them, and I think they will understand it. But it's going to be a new role for him."

Brulte puts it more bluntly: "The Legislature is his first test. Can he and will he stand up to them? That will be the defining moment of his governorship."

Already, those looking to define Davis' political possibilities say the new governor represents a Democratic mirror image of Wilson.

Both men have an unwavering focus, a military-style discipline and a keen understanding of the power of political moderation. And although Wilson tried to lead from just right of center and Davis leans toward center left, neither is easily driven off course by the more strident members of his party.

Davis' message to the impatient Democrats is expected to be direct and pragmatic, political insiders say: Cool your heels for the good of the party -- and California. Many political observers say that in a fight, Davis wins. And he already has made Democrats start walking the walk.

"If you listen closely (to Democratic legislators), you can already hear the change," said Brulte. "Gray hasn't been sworn in yet, and he is already in the process" of getting their cooperation.

Davis will have to be creative in several complex areas where quick fixes and concrete results will be tough to come by.

Among his challenges:

-- Education. Davis reaps the benefits of Wilson-era reforms already in place. Among them are smaller class sizes, cuts in university admission fees and more equitable school district financing formulas.

"By the end of his first term, having promised so much and having promised to focus so intensely, (education) will be, and ought to be, the yardstick by which his first term is measured," said political analyst Sherry Bebitch Jeffe. "He must pick and choose a few pilot projects and begin to get focused on some experiments in reform. He has to look at moving (students' test) scores, whether it will be statewide or in these few local districts."

Davis has said his first priorities will be accountability, teacher training and boosting children's reading capabilities.

He will have to push for tougher standards and performance.

"It's going to be a very interesting thing to see how far Gray is willing to go to push for real accountability," said Wilson, "because certainly every effort that has been made to date has been resisted, stoutly resisted, not only by the teachers unions, but by all their auxiliaries."

Still, Wilson lauds Davis' appointment of former CSU chancellor Barry Munitz, a "very superior educator and executive," to head his transition team as a possible signal to those teachers unions. "If he does that, I'll lead the applause," said Wilson. "And he is probably in better position, having a Legislature of his own party, than I was. . . . They accused me of being a bully. How do you bully a majority?"

-- Growth and Infrastructure. With California facing an expected population increase of 20 million by the year 2020, Davis will be judged on how he handles the major problems that come with it. Those include how to prepare people to be members of the workforce, build roads to move goods, construct workers' housing and figure out how to pay for it all, said Steven Levy, an economist with the Palo Alto-based Center for the Continuing Study of the California Economy.

But smart growth planning will also require state and local fiscal reforms, Levy said. "The way the tax structure is set up, most cities lose money on housing. You need reform to attract housing, attract people back to cities and reduce sprawl."

Wilson tried to put a growth management plan into effect, but his efforts stalled. Now, there are high hopes. "This is a new era with economic growth and growing revenue," Levy said, "and it may be time to revisit it."

-- Taxes and the Economy. Even before he takes office, Davis has said some of his initiatives might be on hold. Last month, legislative analyst Elizabeth Hill forecast a $1 billion budget shortage by July 2000, given the slower economic growth expected in the coming year and a bill for $1.4 billion in new spending.

Much of what Davis does will be judged against the health of the state economy at the end of his first term. Although robust now, California's markets must survive the effects of a volatile Asian economy.

-- Technology. With just a year to go before the turn of the century, Davis inherits a potentially devastating problem: ensuring that state computers are prepared to handle the changeover to the year 2000. If not, agencies and services could be disrupted, checks delayed -- and that is just the beginning of California's "Y2K" crisis, said Randlett of the Technology Network.

There has been no comprehensive assessment yet of where California state agencies stand. "Just finding out where everybody is will take 30 days at a breakneck speed -- and then you've got to get to the work on the problem areas," said Randlett. "There's a limited number of Y2K programmers, and . . . you can't train people fast enough."

It is the equivalent of being handed the crisis "at the bottom of the ninth, with nobody on and two outs," said Randlett. "As the chief executive of California, he'll be making triage decisions."

-- Environment and Water Policy. On the list of issues that Davis will have to address quickly are recycling policies, resource bonds to buy state parks and wetlands, stronger initiatives to protect children's health and provide access to coastal areas and more aggressive programs to guard the environment in key areas such as Lake Tahoe.

Environmentalists say they will also judge Davis on his key appointments, such as those to the California Coastal Commission and the state Department of Forestry. They also want him to reassert his campaign pledge that 40 existing offshore oil leases will not be developed.

Davis will have to come up with a water policy to keep environmentalists happy while meeting the needs of California's agriculture industry, the state's largest water user, which exports $6.7 billion in goods each year.

Among the most important issues facing Davis will be CalFed, the federal proposal that could renew furious battles over creating a peripheral canal in the Sacramento-San Joaquin River Delta to transport precious water southward.

Already, CalFed has caused tension between the water-rich north and the drier south, each wanting its share of the wealth. In 1982, a state ballot initiative to build such a canal was resoundingly defeated. Whatever is decided under Davis' watch, the outcome will affect the quality of water in the delta region and the quantity to agricultural users in the south.

-- Diversity. "The governor- elect has always made clear that he intends to appoint an administration that looks like California, from the north to the south, men and women, people of color," said Davis press secretary Michael Bustamante.

If Davis can make good on that promise, even as California becomes the largest minority-majority state, "that would forge his legacy and heal the wounds," said Elahe Enssani, a San Francisco State University civil engineering instructor and Democratic activist. "It will be a key to the next election."